Peak Apple? No: just peak smartphone

This morning’s Observer column:

On 2 January, in a letter to investors, Tim Cook revealed that he expected revenues for the final quarter of 2018 to be lower than originally forecast.

Given that most of Apple’s revenues come from its iPhone, this sent the tech commentariat into overdrive – to the point where one level-headed observer had to point out that the sky hadn’t fallen: all that had happened was that Apple shares were down a bit. And all this despite the fact that the other bits of the company’s businesses (especially the watch, AirPods, services and its retail arm) were continuing to do nicely. Calmer analyses showed that the expected fall in revenues could be accounted for by two factors: the slowdown in the Chinese economy (together with some significant innovations by the Chinese internet giant WeChat); and the fact that consumers seem to be hanging on to their iPhones for longer, thereby slowing the steep upgrade path that had propelled Apple to its trillion-dollar valuation.

What was most striking, though, was that the slowdown in iPhone sales should have taken journalists and analysts by surprise…

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The real significance of the Apple slide

Apart from the fact that the Chinese economy seems to be faltering and collateral damage from Trump’s ‘trade war’ what the slide signals is that the smartphone boom triggered by Apple with the iPhone is ending because we’re reaching a plateau and apparently there’s no New New Thing in sight. At any rate, that’s Kara Swisher’s take on it:

The last big innovation explosion — the proliferation of the smartphone — is clearly ending. There is no question that Apple was the center of that, with its app-centric, photo-forward and feature-laden phone that gave everyone the first platform for what was to create so many products and so much wealth. It was the debut of the iPhone in 2007 that spurred what some in tech call a “Cambrian explosion,” a reference to the era when the first complex animals appeared. There would be no Uber and Lyft without the iPhone (and later the Android version), no Tinder, no Spotify.

Now all of tech is seeking the next major platform and area of growth. Will it be virtual and augmented reality, or perhaps self-driving cars? Artificial intelligence, robotics, cryptocurrency or digital health? We are stumbling in the dark.

Yep. Situation normal, in other words.

The feeding frenzy about the drop in Apple’s share price

I find the media obsession with Apple’s valuation really tiresome. That’s not just because I don’t own any shares but also because it suggests that mainstream journalists haven’t been paying attention. Way back in August, for example, Bloomberg’s Tim Culpin published a very perceptive piece under the headline “Dark Clouds Gather as Tech Stockpiles Hit Pre-Crisis Levels” which made it crystal clear that there was a slowdown coming.

But even if journalists don’t pay much attention to supply chains you’d have thought that common sense and everyday experience would have taught them that the iPhone picture was changing. I’ve lost count of the number of friends, colleagues and acquaintances who are happily still using their four- or five-year-old iPhones. The devices still work perfectly for their purposes. Sure, the camera isn’t as good as the one on the iPhone XS, but it’s still good enough for everyday use. My trusty old iPhone 6 is still more than adequate for my purposes. In fact, since the last couple of IOS updates and a replacement battery, it’s as good as it ever was. And one of the things that would stop me upgrading is that I find its fingerprint recognition much more convenient for secure online activities than the much-touted face recognition in the newer iPhones would be. I’ve been an early adopter and a gadget freak for as long as I can remember. So if I’m not upgrading, then must be lots more like me.

Could it be that most mainstream tech journalists always have the latest iPhones because their employers pay for them? And so they have fallen into the delusion of thinking that they’re normal consumers?

Apple, the App Store and monopoly

This morning’s Observer column:

Because Apple has always specialised in control freakery and doesn’t allow anybody else to use its iOS platform without prior approval, the App Store was from the beginning owned and controlled by Apple. If you wanted to create an app for the iPhone (and later the iPad), it had to be approved by Apple and sold on the App Store. And if a developer wanted to charge for the app, then Apple took a 30% cut on the price.

So, in relation to the App Store, Apple is definitely a monopolist. The question underlying the supreme court hearing was: is it an abusive monopolist? And if so, are customers of the App Store entitled to damages? Does the operation of the store give rise to consumer harm and thereby trigger redress under US antitrust law?

The case goes back to 2011…

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Tech stasis and planned obsolescence

Like most of my peers in the tech-commentary business, I generally tune into the twice-yearly events at which senior Apple executives reveal the latest wonders to emerge from the creative imagination of Jony Ive. Part of the entertainment value of these gabfests is seeing grown billionaires talking like teen tech worshippers (everything is ‘incredible’ or even ‘fantastic’; the company exists to help customers to enhance their innate ‘creativity’ with new products that we will all ‘just love’, etc). But usually, buried in the superheated hoopla there’s the odd genuinely interesting new thing.

But this week’s event — which was held in New York rather than San Francisco (itself a first, I think) — was strangely dull. There’s a new MacBook Air, but actually it’s hard to see why it’s needed. The new one has a Retina screen, but I can’t see why anyone would get excited just about that when the underlying hardware is much the same as before. And, overall, Apple’s laptop lineup looks strangely incoherent. The two big announcements, to judge from the presentations, were a substantially enhanced Mac Mini and a new iPad Pro. The new Mini is welcome because for many of us it’s the most useful little workhorse that Apple has ever produced. And the new iPad is clearly a a serious upgrade of a product that’s already way ahead of the competition.

But here’s the rub. I’ve had an iPad Pro since the product was first launched, and it’s the most useful — and usable — device I’ve ever owned. In combination with the Apple Pencil it has entirely replaced the paper notebooks that I’ve always used up to now. It goes everywhere with me, does exactly what I need a tablet to do, and does it very well. So no matter how fancy the new iPad ( and its enhanced Pencil) is, I have no rational reason to consider upgrading.

(And much the same applies to all the other Apple kit I own and use on a daily basis. My four year old MacBook Pro is still a terrific workhorse. My iPhone 6 has been re-energised by a new battery and IoS12. And the watch does what I want it to do, even if it could use a longer battery life.)

These big Apple events are often — and justly — ridiculed for being just revivalist meetings for the Church of Apple. Tim Cook & Co are always preaching to the choir. And, since I’m a long-term Apple user, I could be regarded as one of the above. But if even a hardened user can find no reason to upgrade, what’s the point of all the hoopla?

My friend Charles Arthur — he of the wonderful Overspill and an acute observer of these things — thinks that people like me were not the intended audience for this week’s event. It was, he wrote in an email, “one of those events where they’re not speaking to people who already have them – it’s those who haven’t found a need to cross the gap to doing more work on the iPad. USB-C would be interesting to quite a lot of photographers, perhaps.”

Perhaps. But maybe we’ve arrived at what Charles calls — “a sort of tech stasis”. Many of the things we have are now Good Enough, and so despite Moore’s Law and the wonders of computational photography, etc. we don’t need to upgrade them every year, or every two years.

If that’s indeed what’s happening, then what are the implications for tech companies that are hooked on planned obsolescence to a degree that even General Motors in its heyday couldn’t dream of?

A picture is worth a trillion operations

This morning’s Observer column:

If you’re a keen photographer (which this columnist is) one of the things you prize most is a strange property called bokeh. It’s the aesthetic quality of the blur produced in the parts of an image that are not of central interest – the way a lens renders out-of-focus points of light. You often see it in great portraits: the subject’s eyes are razor-sharp but the – potentially distracting – background is fuzzy.

In the era when all photography was analogue, the only way to get good bokeh was to use lenses that produced narrow depth of field at wide apertures. Since the optical performance of most lenses decreased at such apertures, that meant that serious photographers faced a trade-off: their lust for bokeh involved compromising on overall image quality. And the only way round that was to spend money on lenses of complex design and exceedingly high optical quality. Neither of these came cheap: a photo-buff of my acquaintance, for example, recently laid out a small fortune for a Leica Noctilux f0.95 aspherical lens, which, its manufacturer claims, provides “unique bokeh”. (At a retail price of £9,100 it jolly well ought to.)

Enter Apple, which was once a struggling computer company…

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The benefits of having an honest business model

Interesting column by Farhad Manjoo:

Because Apple makes money by selling phones rather than advertising, it has been able to hold itself up as a guardian against a variety of digital plagues: a defender of your privacy, an agitator against misinformation and propaganda, and even a plausible warrior against tech addiction, a problem enabled by the very irresistibility of its own devices.

Though it is already more profitable than any of its rivals, Apple appears likely to emerge even stronger from tech’s season of crisis. In the long run, its growing strength could profoundly alter the industry.

For years, start-ups aiming for consumer audiences modeled themselves on Google and Facebook, offering innovations to the masses at rock-bottom prices, if not for free. But there are limits to the free-lunch model.

If Apple’s more deliberate business becomes the widely followed norm, we could see an industry that is more careful about tech’s dangers and excesses. It could also be one that is more exclusive, where the wealthy get the best innovations and the poor bear more of the risks.

Yep. They wind up as feedstock for surveillance capitalism. The moral of the story: honest business models — in which you pay for what you get — are better. Or, as Manjoo puts it:

The thrust of Apple’s message is simple: Paying directly for technology is the best way to ensure your digital safety, and every fresh danger uncovered online is another reason to invest in the Apple way of life.

The problem is that that particular ‘way of life’ is expensive.

Computational photography

It’s hard to believe but Apple has 800 people working just on the iPhone camera. Every so often, we get a glimpse of what they are doing. Basically, they’re using computation to enhance what can be obtained from a pretty small sensor. One sees this in the way HDR (High Dynamic Range) seems to be built-in to every iPhone X photograph. And now we’re seeing it in the way the camera can produce the kind of convincing bokeh(the blur produced in the out-of-focus parts of an image produced by a lens) that could hitherto only be got from particular kinds of optical lenses at wide apertures.

Matthew Panzarino, who is a professional photographer, has a useful review of the new iPhone XS in which he comments on this:

Unwilling to settle for a templatized bokeh that felt good and leave it that, the camera team went the extra mile and created an algorithmic model that contains virtual ‘characteristics’ of the iPhone XS’s lens. Just as a photographer might pick one lens or another for a particular effect, the camera team built out the bokeh model after testing a multitude of lenses from all of the classic camera systems.

Really striking, though, is an example Panzarino uses of how a post-hoc adjustable depth of focus can be really useful. He shows a photograph of himself with his young son perched on his shoulders.

And an adjustable depth of focus isn’t just good for blurring, it’s also good for un-blurring. This portrait mode selfie placed my son in the blurry zone because it focused on my face. Sure, I could turn the portrait mode off on an iPhone X and get everything sharp, but now I can choose to “add” him to the in-focus area while still leaving the background blurry. Super cool feature I think is going to get a lot of use.

Yep. Once, photography was all about optics. From now on it’ll increasingly be about computation.

The significance of the new Apple watch

Jon Gruber nails it with a typically insightful piece:

All three products (counting XS and XS Max as a single product in two sizes, which, as I’ll explain later, is how to think about them) are interesting, but to me, the Series 4 watch was the standout of the show. The XS and XR iPhones are refinements to the landmark X that was announced last year. The Series 4 watch is a landmark redesign.

I would argue that the landmark iPhone models were the original, the iPhone 4, the iPhone 6, and the iPhone X. It’s kind of interesting to me how the Apple Watch’s evolution has paralleled the iPhone’s. A first-generation model like nothing seen before, good enough to change an entire industry but deeply flawed in certain obvious ways. Second and third generation models that simply address those obvious flaws. And then a fourth generation model that takes things to an altogether new level, particularly pertaining to the display and the physical case of the device.

In the presentation, Apple executives made a big deal of the ECG feature of the new watch, especially the fact that it has FDA clearance. It is a big deal — as anyone with heart trouble will confirm. But Apple is being disingenuous in not acknowledging that they are late to this particular party. A company called AliveCor has been marketing an ECG monitor for the iPhone — and (irony of ironies) a special watch-band for the Apple Watch for some years. I know about it because a friend of mine found it to be a life-enhancing piece of kit. In fact, in lectures over the last two years I’ve been citing it as an example of the unquestionable upsides of mobile technology.

I guess those billionaire executives can’t bring themselves to admit that they’re behind some curves. That’s not to say that their implementation of the ECG tech isn’t neat. It is. But it’s not the first.